How Much Do Nonprofit Executive Directors Really Get Paid?

This post is a follow-up to recent research on nonprofit CEOs highlighted and summarized here: Inside Daring to Lead 2011: 42 Important Findings About Nonprofit Executive Directors.

The Daring to Lead 2011 study gave the nonprofit sector some good food for thought by painting a picture of the nonprofit CEO experience, from getting hired all the way down to working with the board. One section of the findings that immediately jumped out at me in relation to the others: executive director compensation. This topic gets a lot of attention in the nonprofit world, so it was great to see some numbers here.

Though we do have to keep in mind, as Jan Masaoka points out in Blue Avocado, that:

. . . survey data is often of little use, because of small sample sizes, samples weighted towards universities, and the reality that all surveys show enormous variation in salaries for nonprofits of the same fields and sizes. An example of the inconsistency of data: one recent national survey showed average executive director salary to be $60,000 while another reported $158,000.

That said, it can still be interesting to see data – any data – in a field where talking about salaries is a big no-no. So let’s take a look at the Daring to Lead findings a little more closely, shall we?

How Much Do Nonprofit CEOs Earn?

chart of nonprofit executive director compensation, 2011

When I first read through the report, the analysis of the compensation findings stated that the majority of nonprofit CEOs earn between $50,000 and $75,000, which is a bit misleading. The data show that 28% of nonprofit CEOs earn between $50,000 and $75,000, which is the largest group, but sends the wrong message given the rest of the information being presented. For these salary averages to be useful for future CEOs and for boards who may be hiring new executives, it might be better to stick with the facts themselves:

50% of executives earn between $50,000 and $100,000 annually.
23% of nonprofit CEOs earn less than $50,000.
18% earn between $100,000 and $150,000.
Only 8% of executives earn over $150,000.
Only 2% earn over $200,000.

Also, here is more data on the salary ranges broken out by budget size.

How Satisfied Are Nonprofit CEOs with Their Salaries?

I was actually pretty surprised at the numbers reflecting the salary satisfaction of nonprofit executive directors. I always hear people groaning about how underpaid they are in the nonprofit sector compared to other fields. The common sentiment among readers of this blog, at least, is that nonprofit workers do not get paid enough. But as a CEO, your compensation is generally much higher, so your satisfaction may vary in being at the top of the food chain.

According to Daring to Lead, most nonprofit CEOs are happy as pie with their salaries:

Over two-thirds (68%) of executive directors are satisfied with their compensation.
27% report being very satisfied and 41% report being somewhat satisfied.
Ten percent (10%) are not at all satisfied and another 18% report being a little satisfied.

Given this new data, it may be safe to say that while the actual paychecks that nonprofit executive directors bring home may vary, keeping them satisfied in their jobs extends way beyond how much money they make.

What do you think? What story does this data tell about the nonprofit executive director experience?

Further reading from Jan Masaoka at Blue Avocado: How Much to Pay the Executive Director?

http://twitter.com/NickSava Nick Savarese

I was once an Executive Director who fell into the $0- $30K, but we only had one paid staff member (me) and it was part-time. Overall I cannot speak to other Executive Director experiences but at many nonprofits there is a large gap between ED salary and the rest of the staff. Therefore the ED could be satisfied with his/her salary, but the rest of the staff is really scraping to get by.

http://www.rosettathurman.com/ Rosetta Thurman

Nick, thanks for sharing your story here and great points about nonprofit salary satisfaction!

“…at many nonprofits there is a large gap between ED salary and the rest of the staff. Therefore the ED could be satisfied with his/her salary, but the rest of the staff is really scraping to get by.”

Mkurtzha

I just listened to a guess speaker in my Law, Public Policy, and Arts class and she told us that we will be more successful throughout our careers if we “View experiences as compensation.” I think many non-profit CEO’s are satisfied with their salaries because they find the job itself rewarding.
http://www.sarahwmackey.com Sarah W Mackey

I think this data does accurately reflect actual opinions of nonprofit CEOs and their view of their own salaries. You reference that many others have expressed views that nonprofit professionals are underpaid, which is a contradiction to this report. However, those general opinions may be based on perceptions as opposed to reality or educated opinions about the actual salaries. This study asked specific questions to those who they sought information and insight about; therefore I would tend to think it is a more accurate picture of reality than the general perceptions of individuals that are merely loosely impacted or related to the subject being surveyed.
Sistergirl

I think most professionals do not think they get paid enough especially those in social service fields like most nonprofits and public service professions because its a emotional type field. You interact a lot with people and you have to put lots of time in to get a small result. I am not even going to talk about the frustration of fundraising or working with sororities and fraternities and neighborhood nonprofits. What is the price for neglecting your family time? No I don’t think nonprofit CEO get paid enough.
http://www.facebook.com/profile.php?id=902580 Drew Love

Great study, and really important to share. It’s interesting to see the range of salaries available to EDs as I’ve only been exposed to a handful of salaries. It’s encouraging to see the range that’s out there.
http://twitter.com/bsaunders bsaunders

I think the data is flawed because it ignores the reality that whether a company is “nonprofit” or not is not the only factor – maybe not even the major factor. The biggest factors in pay are the budget of the organization and the size of the organization. Being the ED of an NPO who has only one paid employee and makes $15K per year is comparable to being a freelancer with a couple of small, steady clients who gets additional projects sporadically. Being the ED of a $1M agency with 20 employees, 3 of whom are professionals might be comparable to being President of a local print shop that does $1M worth of business on a small commercial strip. And so on.

If the organization is paying significantly less than COMPARABLE for-profit organizations (size, amount of work, skill level,) it’s likely underfunded or poorly structured. If it’s paying significantly more, it’s probably corrupt.
http://www.compackage.com Joe Blattner

It’s important for employees at any level, in any type of workplace, to know how much they’re really making. This means being able to assess all forms of compensation, not just the paycheck. It may be even more important for those in non-profit jobs who aren’t making as much as other CEO’s not to forget about perks and other non-financial forms of compensation that are part of the whole package. Non-profits would do well to provide total compensation statements to their employees on a regular basis.